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cialm is made, they contend that the burden of proof is on the claimant to show what the profits would have been; and as the court of claims expressly, inds that it does not appear from the evidenco whether or not the claimant would have made any profits, or would have incurred loss, therefore the.laim-i ant was not entitled to judgment for any amount whatever.
The manner in which the subject was viewed by the court of claims is shown by the following extract from its opinion: “Whatever rule may be adopted in calculating the damages to a contractor when, without his fault, the other party, during its progress, puts an end to the contract before completion, the object is to indemnify him for his losses sustained and his gains prevented by the action of the party in fault, viewing these elements with relation to each other. The profits and losses must be determined according to the circumstances of the case and the subject-matter of the contract. The reasonable expenditures already incurred, the unavoidable losses incident to stoppage, the progress attained, the unfinished part, and the probable cost of its completion, the whole contract price, and the estimated pecuniary result, favorable or unfavorable to him, had he been permitted or required to go on and complete his contract, may be taken in consideration. Sickels' Case, 1 Ct. Cl. 214; Speed's Case, 2 Ct. Cl. 429; affirmed on appeal, 8 Wall. 77, and 7 Ct. Cl. 93; Wilder's Case, 5 Ct. Cl. 468; Bulkley's Case, 7 Ct. Cl. 543, 19 Wall. 37, and 9 Ct. Cl. 81; Parish's Case, 100 U. S. 500; Field's Case, 16 Ct. Cl. 434; Moore & Krone's Case, 17 Ct. Cl. 17; Power's Case, decided at this term; Masterson v. City of Brooklyn, 7 Hill, 71. The amount of the claimant's unavoidable expenditures and losses already incurred are set forth in the findings. But we can give him nothing on account of prospective profits, because none have been proved. So, for the same reason, we can deduct nothing from his expenditures on account of prospective losses which he might have incurred had he not been relieved from completing his contract. This leaves his expenditures as the only damage proved to have resulted to him from the defendant's breach of contract, and are, therefore, the proper measure of damages under all the circumstances of the case."
We think that these views, as applied to the case in hand, are substantially correct. The claimant has not received a dollar, either for what he did, or, for what he expended, except the proceeds of the property which remained on his bands when the performance of the contract was stopped. Unless * there is some artificial rule of law which has taken the place of natural justice in relation to the measure of damages, it would seem to be quite clear that the claimant ought at least to be made whole for his losses and expenditures. So far as appears, they were incurred in the fair endeavor to perform the contract which he assumed. If they were foolishly or unreasonably incurred, the government should have proven this fact. It will not be presumed. The court finds that his expenditures were reasonable. The claimant might also have recovered the profits of the contract if he had proven that any direct, as distinguished from speculative, profits would have been realized. But this he failed to do; and the court below very properly restricted its award of damages to his actual expenditures and losses.
The prima facie measure of damages for the breach of a contract is the amount of the loss which the injured party has sustained thereby. If the breach consists in preventing the performance of the contract, without the fault of the other party, who is willing to perform it, the loss of the latter will consist of two distinct items or grounds of damage, namely,—First, what he has already expended towards performance, (less the value of materials on hand;) secondly, the profits that he would realize by performing the whole contract. The second item, profits, cannot always be recovered. They may be too remote and speculative in their character, and therefore incapable of that clear and direct proof which the law requires. But when, in the language of Chief Justice NELSON, in the case of Masterson v. Mayor of Brook
lyn, 7 HII, 69, they are “the direct and immediate fruits of the contract," they are free from this objection; they are then “part and parcel of the contract itself, entering into and constituting, a portion of its very elements; something stipulated for, the right to the enjoyment of which is just as clear and plain as to the fulfillment of any other stipulation." Still, in order to furnish a ground of recovery in damages, they must be proved. If not proved, or if they are of such remote and speculative character that they cannot be legally proved, the party is confined to his loss of actual outlay and expense. This loss, however, he is clearly entitled to recover in all cases, unless the other party, who has voluntarily stopped the performance of the contract, can show the contrary.
The rule, as stated in Speed's Case, is only one aspect of the general rule. It is the rule as applicable to a particular case. As before stated, the primary measure of damages is the amount of the party's loss; and this loss, as we have seen, may consist of two heads or classes of damage-actual outlay and anticipated profits. But failure to prove proits will not prevent the party from recovering his losses for actual outlay and expenditure. If he goes also for profits, then the rule applies as laid down in Speed's Case, and his profits will be measured by “the difference between the cost of doing the work and what he was to receive for it,” etc. The claimant was not bound to go for profits, even though he counted for them in his petition. He might stop upon a showing of losses. The two heads of damage are distinct, though closely related. When profits are sought a recovery for outlay is included and something more. That something more is the profits. If the outlay equals or exceeds the amount to be received, of course there can be no profits. When a party injured by the stoppage of a contract elects to rescind it, then, it is true, he cannot recover any damages for a breach of the contract, either for outlay or for loss of profits; he recovers the value of his services actually performed as upon a quantum meruit. There is then no question of losses or profits. But when he elects to go for damages for the breach of the contract, the first and most obvious damage to be shown is the amount which he has been induced to expend on the faith of the contract, including a fair allowance for his own time and services. If he chooses to go further, and claims for the loss of anticipated profits, he may do so, subject to the rules of law as to the character of profits which may be thus claimed. It does not lie, however, in the mouth of the party, who has voluntarily and wrongfully put an end to the contract, to say that the party injured has not been damaged at least to the amount of what he has been induced fairly and in good faith to lay out and expend, (including his own services,) after making
allowance for the value of materials on hand; at least it does not lie in the mouth of the party in fault to say this, unless he can show that the expenses of the party injured have been extravagant, and unnecessary for the purpose of carrying out the contract.
It is unnecessary to review the authorities on this subject. Some of them are referred to in the extract made from the opinion of the court below; others may be found referred to in Sedgwick on the Measure of Damages, and in Smith's Leading Cases, vol. 2, p. 36, etc., (notes to Cutter v. Powell;) Add. Cont. &ş 881, 897. The cases usually referred to, and which, with' many others, have been carefully examined, are, Planche v. Colburn, 5 Car. & P. 58; S. c. 8 Bing. 14; Masterson v. Mayor of Brooklyn, 7 Hill, (N. Y.) 61; Goodman v. Pocock, 15 Q. B. 576; Hadley v. Baxendale, 9 Ex. 341; Fletcher v. Tayleur, 17 C. B. 21; Smeed v. Foord, 1 El. & El. 602; Inchbald v. Western Coffee Co. 17 C. B. (N. S.) 733; Griffin v. Colder, 16 N. Y. 489; and the casa of U. 8. v. Speed, supra.
It is to be observed that when it is said in some of the books that where one party puts an end to the contract the other party cannot sue on the con. tract, but maust sue for the work actually done wadar it, as upon a quantum
meruit; this only means that he cannot sue the party in fault upon the stipulations contained in the contract, for he himself has been prevented from performing his own part of the contract upon which the stipulations depend. But, surely, the willful and wrongful putting an end to a contract, and preventing the other party from carrying it out, is itself a breach of the contract for which an action will lie for the recovery of all damage which the injured party has sustained. The distinction between those claims under a contract which result from a performance of it on the part of the claimant, and those claims under it which result from being prevented by the other party from performing it, has not always been attended to. The party who voluntarily and wrongfully puts an end to a contract, and prevents the other party from performing it, is estopped from denying that the injured party has not been • damaged to the extent of his actual loss and outlay fairly incurred.
The particular form of the petition in this case ought not to preclude the claimant from recovering what was fairly shown by the evidence to be the damage sustained by him. Though it is true that he does pray judgment for damages arising from loss of profits, yet he also prays judgment for the amount of his outlay and expenses, less the amount realized from the sale of materials on hand. The claim for profits, if not sustained by proof, ought not to preclude a recovery of the claim for losses sustained by outlay and expenses. In a proceeding like the present, in which the claimant sets forth by way of petition a plain statement of the facts without technical formality, and prays relief either in a general manner, or in an alternative or cumulative form, the court ought not to hold the claimant to strict technical rules of pleading, but should give to his statement a liberal interpretation, and afford him such relief as he may show himself substantially entitled to it within the fair scope of the claim as exhibited by the facts set forth in the petition.
We think that the judgment of the court of claims was right, and it is affirmed.
REMOVAL TO FEDERAL COURT-INTERVENOR ALREADY REPRESENTED.
An intervenor who is already substantially represented by one of the parties to the suit, under whom he claims, is subject to all the disabilities resting upon that party; and even though his intervention raise a separate controversy he cannot remove the cause to the United States court after the right of removal has been barred as against the party under whom he claims.
Appeal from the Circuit Court of the United States for the Northern Dis trict of Illinois.
Chas. M. Osborne, for appellant.
WAITE, C. J. This is an appeal from an order of the circuit court remanding a suit removed from a state court. From the confused mass of plead. ings, exhibits, proofs, orders, and decrees, making a volume of more than 500 printed pages, sent here as a transcript of the record below, and
the reports of the decisions of the supreme court of Illinois in Sumner v. Waugh, 56 III. 531; Cable v. Ellis, 86 111. 525; and Ellis v. Sisson, 96 nl. 105, referred to on both sides as part of the case, we have, with the help of the briefs of counsel, extracted the following facts which, in our opinion, are decisive of the present controversy:
1 See Klis v. Sisson, 11 Fed. Rep. 353.
On the third of June, 1858, Thomas B. Ellis bought of John M. Waugh and Henry B. Ellis certain lands and mill property in Illinois. Waugh and Henry B. Ellis were at the time indebted to Thomas B. Ellis to the amount of $8,000, or thereabouts, and the mill property was incumbered by a mortgage to Benjamin T. Sisson for $9,280. Thomas B. Ellis paid for the property by releasing the debt due himself, assuming the mortgage to Sisson, and giving his own notes to Waugh and Henry B. Ellis, secured by mortgage on the property for $14,984.54. On the thirtieth of September, 1858, Thomas B. Ellis entered into a written contract with Sisson and John B. Rathbun for the sale, release, and conveyance of “all his paid-in interest” in the property, for which the purchasers were to pay as in the agreement specified, including with the rest such a sum to Thomas B. Ellis, personally, as from authenticated bills it should appear he had “paid in.” To secure the payment of such sum as should be found to be due him, a mortgage was to be given ou the property. Under this contract, possession was delivered to the purchasers. Disputes having arisen as to the amount of the “authenticated bills,” Thomas B. Ellis, on the twenty-first of March, 1861, filed a bill in chancery in the Mercer county circuit court, to enforce a specific performance of the contract. To this bill Waugh, Sisson, and Rathbun were made de fendants, and the prayer was that the mortgages of Waugh and Henry B. Ellis to Sisson, and Thomas B. Ellis to Waugh and Henry B. Ellis might be canceled, and that the amount of purchase money due Thomas B. Ellis from Sisson and Rathbun might be ascertained and adjudged to be the paramount lien on the property in the hands of the purchasers. As to Waugh, the averments were, in substance, that he was “in fact and in equity" a purchaser of the property with Sisson and Rathbun, and that by the terms of the contract, the notes and mortgage of Thomas B. Ellis, then held by Waugh, and the mortgage to Sisson, were to be canceled, and a first lien on the property given to Thomas B. Ellis as security for the purchase money to be paid to him. In 1862 Sisson assigned his notes and mortgages to Austin, Sumner & Co., and in 1864 they began a suit for foreclosure in the Mercer county circuit court, making Waugh, Sisson, Thomas B. Ellis, and Henry B. Ellis defendants. Thomas B. Ellis answered, and also filed a cross-bill, in which he set up his sale of the property and a cancellation under that sale of the mortgage to Sisson before the tr sfer to Austin, Sumner & Co. The circuit court decreed against Austin, Sumner & Co., and dismissed their bill, but upon appeal to the supreme court, the decree dismissing the bill was reversed in 1869, but the lien of Austin, Sumner & Co. was postponed to that of Thomas B. Ellis for the purchase money under his contract of sale.
As to the mortgage of Thomas B. Ellis to Waugh and Henry B. Ellis, the language of the opinion is as follows: “This contract postponed, also, the mortgage in question to the mortgage executed by T. B. Ellis to Waugh and H. B. Ellis. They were not parties to it, and could not be bound by its provisions. Although the contract seems to contemplate that their mortgage was also to be canceled, it does not appear how or in what mode, and not be ing parties to the agreement, they cannot be affected by it. It is, therefore, the first lien on the property, and must be so held. The whole case, somewhat complicated, it is true, shows a contest between equities. That the complainants have some which should have been regarded by the circuit court and decreed to them, we cannot doubt. The bill should not, therefore, have been dismissed. In order that the equities of the complainants may be enforced, it seems necessary that there should be a foreclosure of the Waugh and Ellis mortgage. * *The pleadings are not framed with a view to any relief as to the Waugh and Ellis mortgage, or as to any substitution of the complainants to the rights of Waugh in the Waugh and Ellis mortgage.
Leave will be given to amend the pleadings as the parties may be advised, and to take further proofs.” Sumner v. Waugh, 56 Iul. 541, 542.
The case was then remanded for further proceedings in conformity with the opinion, in which suggestions were made as to what should be done if the Waugh and Ellis mortgage should be found to be a valid and subsisting lien. After this decision Philander L. Cable took from Waugh an assignment of the note and mortgage of Thomas B. Ellis to Waugh and Henry B. Ellis, and in 1872 be gan a suit in the Mercer county circuit court for a foreclosure. To this suit Thomas B. Ellis, Sisson, and Austin, Sumner & Co. were made defendants. Thomas B. Ellis answered, setting up his contract of sale, and claiming a cancellation of the mortgage thereby.
On the sixth of May, 1873, an order was entered in the circuit court consolidating the three suits, to-wit, that of Thomas B. Ellis, that of Austin, Sumner & Co., and that of Philander L. Cable. From that time these three suits were proceeded in as one and involving the same general matter. On the tenth of June, 1875, the circuit court entered a decree establishing the claim of Thomas B. Ellis as against Cable. From this decree Cable appealed to the supreme court, where, in 1877, after holding that the Sisson mortgage could not be enforced as against Thomas B. Ellis, it was said in the opinion delivered: “It was doubtless the intention of the contract of September 30th that the latter mortgage also, [that to Waugh and Ellis,] as well as the former, [that of Sisson,] should be canceled, so as to give T. B. Ellis a superior lien upon the property for the security of the payment of his paid-in interest, and for the carrying out of such intention, and being impressed with the justice of the claim of T. B. Ellis that he should have such security, we have anxlously sought for some satisfactory ground upon which we might rest thesupport of such a claim, but we have not been able to discover any. The written contract of September 30, 1858, was not signed by Waugh, and we cannot hold him as bound by that contract to discharge and release his mortgage, although we may strongly suspect there was a secret understanding to that effect.” Cable v. Ellis, 86 nl. 539, 540. The result was a decision that the Waugh and Ellis mortgage should be first paid, and an order was entered remanding the suit to the circuit court for further proceedings in accordance with the opinion.
The case was redocketed in the circuit court at or before the May term, 1878, and on the twenty-fifth of November, Thomas B. Ellis, by leave of the court, filed an amended bill, in which it was a verred, in substance, that while Waugh did not sign the contract of purchase by Sisson and Rathbun, he did, in fact, agree with Ellis at the time that if the sale was made on the terms proposed, he would postpone his mortgage on the property to the lien of Ellis for the purchase money and release Ellis from the payment of the notes. Answers were filed and new testimony taken. Upon the hearing in the cir. cuit court the lien of Cable, in preference to that of Thomas B. Ellis, was established, and Ellis appealed. In 1880 the supreme court reversed the decree of the circuit court, and in the opinion, when speaking of the former decision in the case, it was said: “There was no proof of such a joint written contract, or of such a joint contract by Waugh, Sisson, and Rathbun as alleged. The allegations and proofs did not agree. The amendment which has been made to the bill of Ellis, since the case was remanded, removes the difficulty which before existed. It sets up a separato verbal agreement on the part of Waugh to release the mortgage. Thon, after an examination of the testimony, the opinion proceeds: “We are satisfied, from the evidence, that outside of this written agreement there was a verbal agreement between Waugh and Ellis to the purport that if Ellis would sell out to Sisson and Rathbun, he, Waugh, would accept such sale in satisfaction of the debt of Ellis to Waugh and H. B. Ellis. We think that by virtue of this agree ment, and the transfer of the property, which was made by T. B. Ellis,